Speakers at a webinar here on Wednesday opined that Bangladesh needs to go for coordinated effort to attract more Foreign Direct Investment (FDI) from the United Kingdom (UK) by addressing the existing challenges.
Dhaka Chamber of Commerce & Industry (DCCI) organised the webinar on “Exploring Trade & FDI Opportunities with the UK” through zoom platform.
“The UK is the second biggest foreign investor in Bangladesh registering accumulated FDI stock of USD 2.45 billion as of March, 2020. More than 200 British companies are operating in Bangladesh. To attract more investment from the UK, Bangladesh needs to design innovative model of diversified product base,” said DCCI President Shams Mahmud.
He said the government can introduce infrastructure bond to attract investment from the UK for developing large infrastructure projects. Continuation of Duty Free Quota Free (DFQF) access to the UK and investment are inevitable to revive our export-led economic growth and employment generation especially in the COVID-hit economic scenario, he added.
Noting that the UK is a large trade and investment partner of Bangladesh since long, he said Bangladesh’s export to the UK was USD 3.45 billion in FY2019-20 whereas it was USD 4.83 billion in FY2018-19, having a negative growth of 28.57 percent.
The DCCI President urged agencies concerned of Bangladesh and UK to undertake necessary steps and dialogues to sign FTA focusing on comprehensive economic integration.
Executive Director of the South Asian Network on Economic Modeling (SANEM) Dr Selim Raihan in his keynote paper said the FDI from UK to Bangladesh in 2018 was USD 370 million which is 10 percent of total FDI in Bangladesh. Whereas FDI from the UK to Asia in 2018 was some USD 247 billion (£186.46 billion) but the share of Bangladesh in that was very negligible, he said.
He said some of the challenges for Bangladesh to attract FDI from UK include lack of export diversification, inadequate policies and strategies, weak collective action of non-RMG sectors, weak enforcement of intellectual property right, high cost of doing business, slow implementation of infrastructural projects including SEZs and LDC graduation.
Dr Raihan, also Economics professor at the Dhaka University, suggested initiating a dialogue for signing FTA negotiation with the UK in the post-LDC graduation era.
Addressing the function, State Minister for Foreign Affairs Md. Shahriar Alam said the UK will give Bangladesh duty and quota free access till 2027. Bangladesh is in the process of discussion over the new tariff regime.
“In the post pandemic situation, our export is on the right track,” he said. “To bring more FDI from the UK we need to intensify and broaden partnership dialogues under the proposed BD-UK joint Commission after the UK's exit from the EU.”
The state minister urged business to business close collaboration of both the countries. “We also need to frame out a post-Covid new market strategy and establish a digital marketplace to promote Bangladeshi innovative products in the UK market. Besides, connecting Bangladeshi Diaspora especially British-Bangladeshi youth is very important,” Shahriar Alam added.
British High Commissioner to Bangladesh Robert Chatterton Dickson said that diversification of products is necessary to increase export competitiveness. He said pharmaceuticals, IT, education, healthcare, service and financial sector have the potential to attract UK investments.
He said reducing the cost of doing business and policy reforms are important to attract FDI.
Bangla Bond in London Stock Exchange creates an opportunity for the business community of both countries to work closely together. “We’re also keen to strengthen our existing trade relation with Bangladesh,” said the British envoy.
Bangladesh High Commissioner to UK Saida Muna Tasneem said that chambers of commerce in Britain are not very much aware of Bangladesh. “Exchanging regular communication between chamber to chamber is key to boost trade and investment,” she said.
Stressing the need for diversification of products, she said Bangladeshi entrepreneurs have a good opportunity to tap UK’s halal market and light engineering sector. “We should try to sustain the GSP beyond the LDC graduation,” she added.
In the services sector, if we want the British companies to come in, there should be a policy decision the government has to take, Tasneem said.
Chairman & CEO of PRAN RFL Group Ahsan Khan Chowdhury, Additional Secretary (FTA Wing) of the Commerce Ministry Sharifa Khan, Executive Director of Rahimafrooz Storage Power Business Faraaz A Rahim, Chairman & CEO, Incepta Pharmaceuticals Ltd Abdul Muktadir, BASIS President Syed Almas Kabir, Managing Director of Anwar Group of Industries Hossain Khaled, Chairman of Chittagong Stock Exchange Asif Ibrahim and Chairman of BUILD Abul Kasem Khan also spoke on the occasion, said a press release.